The funded status of the typical U.S. corporate pension plan jumped to 81.2 percent in January, its highest level since March 2012.
According to the BNY Mellon Investment Strategy Solutions Group, the 4.9 percentage point rise came as rising equities markets raised asset levels and higher interest rates reduced liabilities.
BNY Mellon's research also found that assets for the typical plan increased 3 percent in January as equities markets jumped more than 5 percent in the U.S. and international developed markets. Liabilities fell 3.2 percent as the Aa corporate discount rate rose 24 basis points to 4.13 percent.
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Plan liabilities are calculated using the yields of long-term investment grade bonds. Higher yields on these bonds result in lower liabilities.
"This is a great start for the year for corporate pension plans in the U.S., and we've now had three months in a row of steady improvement in funded status," said Jeffrey Saef, managing director, BNY Mellon Investment Management, and head of the Investment Strategy Solutions Group.
The BNY Mellon Investment Strategy and Solutions Group is a division of The Bank of New York Mellon.
BNY Mellon Investment Management is one of the world's leading investment management organizations and one of the top U.S. wealth managers, with $1.4 trillion in assets under management.
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